Article

Principles without Principals? Reconsidering Unauthorised Agency on the Boundary of Contract: Implied Warranty of Authority and Ratification

By Robert Schulz

The related doctrines of implied warranty of authority and ratification were developed by English courts during the nineteenth century at a time when the modern principles of contract law were being identified and the formulary system of action by writ was coming to an end The doctrines typically arise in the context of commercial agency. Unusually, each doctrine involves both orthodox contractual liability and sui generis elements. The doctrines remain controversial and their status in New Zealand law is unsettled The question arises: are the doctrines historical relics, which have, like other obsolete and unprincipled doctrines of the legal past, been overtaken by the development of the modern law of obligations? The aim of this article is to suggest that New Zealand law would benefit from using the concepts of implied warranty of authority and ratification. The controversial elements of these doctrines must, however, be appropriately limited

Article

Awarded the MinterEllisonRuddWatts Writing Prize

A Square Peg in a Round Hole: Reshaping the Approach to Systemic Negligence in the Modern Public Service

By Rachael Baillie

The public service presents a unique challenge for tort law. For historic and practical reasons it has no separate legal identity from the Crown. Modern public bodies have outgrown this framework; they have developed an institutional nature, relying on systems to co-ordinate the work of individual public servants operating as an integrated unit. Consequently, plaintiffs increasingly claim “systemic negligence”: an allegation the fault of which lies with a flaw in the system itself Properly defined, it is a discrete head of direct liability incompatible with the existing framework. In theory, systemic negligence is a better deterrent and assigns moral responsibility fairly because it reflects the true source of liability-inducing behaviour. Tort law’s distributive function is more problematic; the individualistic nature of a tort claim appears to contradict the public service’s focus on the good of the community. Further, systemic negligence requires courts to consider the merits of polycentric allocative decisions. However, these concerns are ameliorated if courts show a degree of deference when determining if the standard of care has been breached A two-pronged approach is required for reform. First, an evidential duty should be imposed on the public body in cases of systemic negligence. The strictness of the duty should adjust according to the level of allocative decision involved Secondly, legislative amendments are required to explicitly introduce systemic negligence as a distinct form of liability.

Article

“If They Wanted to Know, Why Didn’t They Ask?” A Review of the Insured’s Duty of Disclosure

By Hilary K Wham

The duty of disclosure in New Zealand insurance law is in need of reform. Honest and innocent non-disclosures currently entitle insurers to avoid insurance policies from their inception, leaving an insured with an uncovered loss. This problem could be fixed if only insurers asked the questions they needed the answers to. Insureds who have their claims rejected on the grounds of non-disclosure are left wondering: if they wanted to know, why didn’t they ask? This article examines the current common law duty of disclosure and assesses why this dissatisfaction occurs. It examines the origins of the duty and the reform of the duty in Australia and England The 1998 New Zealand Law Commission paper “Some Insurance Law Problems” is also analysed to assess the workability of New Zealand’s initial attempt at reform. Abolition of the duty altogether and alternative recommendations are also discussed. Ultimately, this article recommends that New Zealand follow Australia and England in creating legislative reform to modernise this area of insurance law.

Article

A Fiduciary Perspective on the State’s Duty to Protect the Environment

By Himmy Lui

Modern environmental law has made little progress in scaling back manifest environmental destruction. By reason of sovereignty, states are ultimately free to ignore international environmental regulation. This article proposes that the legitimacy of state legal authority be reconceptualised on a fiduciary basis. It argues that because every state action has the power to affect the interests of its vulnerable citizens, a duty akin to the common law fiduciary duty requires the state to act with utmost loyalty and in the best interests of its vulnerable subjects. Because environmental harms extend beyond boundaries and generations, this duty must also be cosmopolitan and intergenerational. It requires states to balance the interests of present and future generations of humanity, which is a higher duty than one that is only owed to the current generation within a state’s domestic borders. Discharging this fiduciary duty requires strong engagement with and commitment to ecological sustainability.

Article

A History of Taxing Capital Gains in New Zealand: Why Don’t We?

By Melinda Jacomb

This article considers how New Zealand has treated and taxed or, rather, not taxed capital gains. It attempts to cast light on why there is no comprehensive capital gains tax regime in New Zealand when this tax treatment is an orthodox part of almost all other OECD countries’ tax systems. This article begins by placing New Zealand’s approach to taxing capital gains in an international context, setting out the main arguments for a capital gains tax. Then, starting with Premier John Ballance ‘s Land and Income Tax Assessment Act of 1891, the article surveys the introduction of income taxation in New Zealand The 1891 Act introduced the income tax that we know today. However, due to the distinction drawn between capital and revenue by a long history of case law and a redraft of the Act in 1900, our modern day “income tax” does not capture income from capital gains. The article then traces four key attempts in more recent political history to capture capital gains through the introduction of a form of capital gains tax. The article concludes with a summary of the core existing provisions in the Income Tax Act 2007 that function to capture some types of capital gains and a reflection on what the tax future may hold for capital gains in New Zealand.

Article

Privative Clauses: Parliamentary Intent, Legislative Limits and Other Works of Fiction

By Luke Sizer

Occasionally, Parliament may seek to prevent the courts from judicially reviewing a decision of the executive. A provision that seeks to do so is called a privative clause. The courts approach such clauses with aggression to the point of rendering Parliament’s intent an utter fiction. That approach risks ignoring justifiable limits on the right to judicial review. This article suggests that the courts should begin with the natural meaning of the provision and then see whether or not that meaning is justified. If it is not, then, and only then should the courts attempt an aggressive approach - always bearing in mind that Parliament, if it speaks clear enough, can completely exclude judicial review. The article concludes by examining a hypothetical based on the Spencer case.

Article

Turning That Game Back On: Video Games, Violence and the Myth of Injury to the Public Good

By Elle Crump

On 24 February 2013, it was reported that a New Zealand gamer had been charged with the murder of his cyber rival after losing a battle against him in an online fantasy world game. While the particulars of the case were left ambiguous, the article incited wide online debate regarding the existence of a link between video games and real world violence. As one blogger argued, “[a]nyone [who] thinks games turn people into a murderer is a self centered and ignorant moron.

Article

Succeeding at Succeeding: Revolutions, Courts and the Limits of Legality

By Adam Holden

This article evaluates the principles that should guide courts when revolutionaries defy the legal order. I argue that normative values such as personal liberty and democratic rights are necessary considerations in the courts’ adjudicative process. First, a broad legal definition of revolution will be provided before assessing the importance of the judiciary’s role in determining the legal validity of a revolution. Secondly, the article critiques established judicial approaches to revolutionary legality. Typically, courts have either strictly applied the pre-existing constitution or adopted the efficacy of the rebellion as the sole determining factor for legal authority. The former approach leads to logical absurdity while the latter ignores the revolution’s contextually specific moral aptitude. Both approaches allow the courts to avoid assessing the moral legitimacy of the revolutionaries or the deposed government. Moreover, courts that support efficacy rely upon an erroneous interpretation of Hans Kelsen’s positivist jurisprudence in order to ground a supra-constitutional jurisdiction. Finally, this article promotes the judicial approach where normative values beyond efficacy have been applied. Courts can and should appeal to the supra-constitutional moral consensus of the community in order to evaluate the validity and legitimacy of a purported revolution. Contextual morality is pertinent and theoretically justified.

Article

Abuse of Process: The Need for Structure

By Finn Lowery

The purpose of this article is to propose a more principled framework for determining permanent stay applications in criminal trials. In particular, it suggests how the courts might better respond to abuse of process pleadings, which allege that continuing the prosecution would offend the court’s sense of justice.

Case Notes

Tasman Insulation New Zealand Ltd v Knauf Insilation Ltd

By Anna Chalton

It might seem obvious that trademarks should not be registered for generic or descriptive terms. The function of a mark is to identify that a certain product comes from an identifiable source. Generic marks do not render products more easily identifiable. While they may be advantageous for the owner of the mark, they result in confusion in the market, as consumers struggle to identify products from other sources that can no longer be freely and accurately described. It would be ridiculous, for example, to allow Kleenex to register a mark for the word “tissues”, because it would impede other tissue manufacturers’ ability to accurately label their products. Such marks would provide an unfair advantage for the owner, at the expense not only of its competitors, but also its consumers, and by extension, the market as a whole. As a consequence, generic marks are not registrable. Where the mark becomes generic after registration, it may be revoked. Such revocation is known colloquially as genericide. The issue becomes more complex, however, where the mark has existed for a long time; where the word has become a generic descriptor by virtue of the owner’s own success; or where the word alone is generic but becomes distinctive in certain contexts. Tasman Insulation New Zealand Ltd v Knauf Insulation Ltd is the first New Zealand case to explore the law on this point.

Vineline Nominees Ltd v Commissioner of Inland Revenue

By Shiv Narayan

Vinelight was an appeal by the taxpayers against the decision of the High Court upholding the Commissioner’s assessments, which was an appeal of a decision of the Taxation Review Authority (TRA). As the Supreme Court has denied leave to appeal, the Court of Appeal’s decision is final. The dispute centred on the restructuring of a family’s investments. The family concerned carried out business in New Zealand through Vinelight Investments Ltd (VIL), which, through subsidiaries, engaged in money-lending and invested in real property and shares. It was not in dispute that VIL was a New Zealand resident for tax purposes.

Carr v Gallaway Cook Allan

By Nupur Upadhyay

In June 2014, the New Zealand Supreme Court in Carr v Gallaway Cook Allan set aside an arbitral award, following a successful arbitration, due to a procedural error in the arbitration agreement. Although two key principles behind commercial arbitration are party autonomy and limited judicial intervention, the Supreme Court was willing to set aside the arbitral award due to a drafting error in the arbitration agreement, which both parties had contributed to. This decision has the potential to adversely affect New Zealand’s reputation as an arbitration-friendly nation. The decision also emphasises the need for care in drafting an arbitration agreement.

Legislation Note

Financial Markets Conduct Act 2013

By Taylor Burgess and Caitlin Hollings

Book Review

Youth Justice in Aotearoa New Zealand: Law, Policy and Critique – Alison Cleland and Khylee Quince

By Rosa Polaschek